Samsung announced “Samsung Apps” back at the January Consumer Electronics Show. With the store Samsung is aiming to have a central destination for owners of certain of its HDTVs, Blu-ray players and home theater systems to download free and paid apps that in turn work across multiple Samsung products, particularly mobile phones. The press release indicates that Samsung Apps uses an open platform that Samsung calls its “Internet@TV-Content Service.”  There’s a video on the Samsung site that explains how this works. Something that’s in the fine print of the ad is that owners will also need a Samsung “LinkStick,” a $60 USB wireless adapter in order to get their device online (in other words for now there’s no built-in WiFi just yet anyway).

In the ad there are 16 different apps showcased, from USA Today, Netflix, Dailymotion, Pandora, Twitter, Blockbuster and others. At the Samsung App site there’s also a PDF that lists all the apps that are available for each of the company’s different products that currently offer access. A key recent win was Hulu Plus’s announcement to offer the service first on Samsung connected devices (in addition to the iPad and iPhone) at launch.

Samsung Apps builds on the “widget” model that Yahoo in particular has been promoting for several years now. CE companies like Samsung fully recognize that the TV is the next big thing for online video viewing and possibly for Internet use in general. Connected TV is a competitive imperative for these companies and we can expect to see plenty of promotion going forward (note Sony recently announced a partnership with Google TV).  

In general I like the idea of Samsung and other CE companies making available downloadable apps as it follows nicely on the “app store” paradigm that’s well established in the mobile world. However there are a few challenges I see.

First, there’s going to be strong competition for control of the connected TV experience. This will come primarily from standalone set-tops like Roku, gaming consoles, boxee, Google TV, etc. as well as connected or “hybrid” pay-TV set-tops.  Though Samsung and others will fight hard to control this experience, it’s not clear that consumers see this as the TV maker’s role.

Related to this, there’s the issue of how many new HDTV buyers even continue to use the TV’s remote control, which is critical to navigating to these apps. Many people quickly stow the TV’s remote in favor of the pay-TV provider’s remote or an all-in-one product like Harmony. This is a consumer behavior that Samsung and others will have to reverse.

Lastly there’s a messaging challenge. Even as an industry insider, I found it somewhat confusing to understand how the Samsung App model works. No doubt this will become clearer over time, but getting buyers to think of their TV as more than, well, a TV, is going to take a lot of education, marketing dollars and retail support.

Still, as more TVs are inevitably connected – regardless of the method – the concept of online video viewing and Internet usage on TVs will become more widely known and valued. That will give Samsung and others a tailwind. All of these connected devices pose a new challenge to existing pay-TV providers; if more good stuff is available “over-the-top,” then subscribers have many more opportunities to question the value of their multichannel subscription. I’m not suggesting a rash of cord-cutting is imminent, but by leveling the playing field for content and apps outside the traditional cable ecosystem, Samsung and others will be slowly resetting consumers’ expectations. That suggests pay-TV providers themselves should be offering app stores, and not let third-parties get the upper hand in the connected era.

What do you think? Post a comment now (no sign-in required).

Update – No sooner did I post this than I noticed a Mediaweek story today that Samsung is taking out a 6-page insert across 6 Conde Nast magazines for the next 8 months. No doubt Samsung Apps will be getting heavy attention in the campaign.

Related posts:

1. Cord Cutting Begins, Internet Connected TV in Vogue?
2. Samsung Smartphone lead in Blogging & Social Networking application with Mobile Web Technology
3. Conduit: We’re Doing for Web Apps What iPhone Did for Mobile Apps
4. Bing Launches New Maps with Apps

This week Daisy and I talk about YouTube’s new “Leanback” and mobile experiences, both of which were unveiled this past Wednesday. Daisy was at YouTube’s headquarters and interviewed the company’s mobile product manager Andrey Doronichev. Regarding Leanback, I wrote that it looks promising, as it offers viewers a passive, continuous way to experience a personalized version of YouTube, with all their new favorite video streamed back-to-back. It also makes YouTube a more important part of the Google TV value proposition. Listen in to learn more.

Click here to listen to the podcast (15 minutes, 1 second)

Click here for previous podcasts

The VideoNuze Report is available in iTunes…subscribe today!

Related posts:

1. VideoNuze Report Podcast #66 – July 2, 2010
2. VideoNuze Report Podcast #53 – March 19, 2010
3. VideoNuze Report Podcast #51 – February 26, 2010
4. VideoNuze Report Podcast #50 – February 19, 2010

VideoNuze: What are the 2-3 key trends in digital media we should be watching?

Mitch Berman: I often talk about the growing role of influence, sharing and reward which are tied to social networking. Reward is both the influence you get with other members of your social circle as well as “points.” Another trend is the rise of casual games which are becoming very popular with examples like Farmville. Then I’m also watching the trend toward over-the-top video. Now you have retailers, CE makers, independent over the top players like Roku and others, plus software providers. They’re all attacking the traditional video subscription model.

VN: Is the threat of cord-cutting real or imagined?
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MB: I think there’s more hype than reality for now. The key is the consumer proposition. I’m a sociologist by background so I believe understanding the consumer is so important, but not discussed enough. Another trend is delivering the 3 screen experience. But the culture around each screen is radically different. So for example you can’t just slap a TV show up on a mobile device and expect to succeed. So in this new world, the question is what’s the model for the consumer?

VN: Some people believe the concept of content ownership is dead. What do you think?

MB: I believe that’s partially true. I believe in the cloud model, but both rental and sell-through work, though we don’t know yet for video. There are 2 cloud-based security approaches in the industry – DECE and KeyChest. I believe in that model, but we’ll have to see how it plays out.

VN: What are studios doing right and wrong in TV and movie digital distribution?

MB: As an ex-HBO person I understand the desire to protect valuable assets. The good news is the industry is more and more looking at windows and considering ways to relax them and innovate. The bad news is that I think they’re being overly protective, though I understand it. They have finite resources and are somewhat locked in to existing models. However change is everywhere – when you go into big retail stores you’ll see the amount of distribution for DVDs has shrunk for example. So they need to find new approaches, but they don’t have the resources to try them all.

VN: What are the key things connected devices need to do to succeed?

MB: First of all, there are many different devices. To succeed, they must first be easy to use – plug and play. Also they need to be priced well. Something that’s $99 and up plus a subscription is too high. Look at the pay-tv providers have succeeded – they charge $4.99-6.99 per month for additional box. That used to be an issue when they were called “additional outlets.” But now there’s a charge for the set-top box but it seems free to a lot of people. Then of course there’s the question of what content is available. It’s all over the map right now. We’re still understanding what people really want to do on their TVs, not online or on mobile devices.

VN: What will you be talking about a the LATV Fest?

MB: I’m going to offer a positive view of the world that we’re in an “Industrial Revolution” in the entertainment industry, with all kinds of new opportunities. Learning to monetize in this new world – that’s the big question.

VN: Thanks Mitch.

Related posts:

1. Qwest Plows Millions Into ZillionTV
2. Cisco: Video will be 91% of All IP Traffic by 2014
3. Jeremy Schoemaker (aka Shoemoney) Interview
4. Jeremy Schoemaker (aka Shoemoney) Interview

First up, YouTube introduced the beta version of “Leanback,” the new 10-foot experience that it introduced at the recent I/O conference. With Leanback, you only need to use the 4 arrow keys and Enter key on your keyboard to navigate the YouTube experience. Video plays in full-screen mode and in automatically in HD when available.

There are different options for what content Leanback delivers: if you have set up subscriptions, it will give you a feed of those videos; in addition, if you’ve connected your YouTube account to your Facebook account you’ll also get a feed of videos your friends are watching/sharing; alternatively, if you’ve done neither YouTube will simply give you the most popular comedy, entertainment, news, etc. You can also easily search and browse.
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I gave Leanback a whirl and was impressed. Videos loaded quickly and played beautifully. Since there are tons and tons of videos, the idea of serendipitous discovery is taken to a whole new level. It may seem odd in this era of hyper-interactivity, but it is easy to envision Leanback being a couch potato’s nirvana: just fire up Leanback and sit back and have all the day’s most interesting videos begin unspooling. As I wrote in early June, I continue to believe Leanback is a whole new “channel” experience and will give Google TV, when it launches, a huge tailwind.

Meanwhile, YouTube also rolled out a newly upgraded experience for mobile phones yesterday. The new site at m.youtube.com promises to be faster and also more mobile-friendly, with larger buttons and additional features included from the web site. The effort builds on the mobile site YouTube has offered for several years. YouTube also revealed that playbacks grew by 160% in 2009 and are now up to an astounding 100 million per day. More interestingly, YouTube appears to be trying to migrate users away from the YouTube mobile app which Apple has offered on the iPhone for a while. YouTube is promising web site updates will be followed quickly on the new mobile app, “unlike native apps which are not updated as frequently.”

With the new Leanback and mobile initiatives YouTube is continuing to evolve from its roots as just a user generated content web site. YouTube appears to be firing on all cylinders: hitting a record 14.6 billion views in May, landing big-time advertisers like VISA/Toy Story 3 and Xbox’s Kinnect and adding popular premium content like World Wrestling Entertainment and a new project produced by Ridley Scott. YouTube’s biggest day is still ahead of it, when it will no doubt take center stage in the high-profile launch of Google TV later this year.

I continue to think that YouTube was a superb acquisition for Google. The deal looks more strategic by the day, especially in light of Google’s intensifying battle with Apple.

What do you think? Post a comment now (no sign-in required).

Related posts:

1. YouTube Launches Leanback – A Mouse-Free Interface For Internet-Ready Television
2. YouTube’s Ponies Up $5 Million To Help Partners Produce Better Videos
3. With Leanback, YouTube Could be the First Big Beneficiary of Google TV
4. YouTube Launches New Mobile Ads

One key difference is the idea of “closed” vs. “open.” In the “closed” experience only certain content is available, while in the “open” approach anything that’s available on the Internet becomes available on the big screen. There are pros and cons to each approach. Which is more likely to ultimately succeed? Colin and I will do our best to demystify the issues and forecast what’s most likely to work. There will be plenty of time for audience Q&A. Please join us for this timely complimentary webinar!

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3. A Massive, In-Depth Look At YouTube Closed Captions, SEO and YouTube Indexing
4. VideoNuze Report Podcast #67 – July 9, 2010

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Best Buy is giving Movie Mode a lot of other promotion (including a TV spot) in advance of Friday’s opening of “Despicable Me,” the new 3D animated movie featuring Steve Carell which the app is initially tied to. The idea is that moviegoers turn on the app at the beginning of the show and it will translate what the “Minion” characters are saying while the end credits are running, as well as offering up exclusive new content.

Since the movie hasn’t opened yet I obviously haven’t seen the app in action. But I do like the concept and believe if offers a preview of how important video-capable smartphones are going to become as part of the marketing mix for movies and TV shows.

Two new smartphones – the Evo and Motorola’s Droid X (Verizon) will help fuel this trend; they come with huge 4.3 inch high-res screens which are tailor-made for video viewing (the Evo even has a little kickstand on the back to make viewing easier). The iPhone 4’s 3.5 inch “Retina Display” screen is no slouch either for video viewing and due to its sheer proliferation will be an important driver of this opportunity as well.

It’s easy to envision all kinds of clever promotions depending on the movie or TV show. What comes to mind for me are additional behind-the-scenes content available only to ticket buyers, sneak previews for advance online ticket buyers, “Groupon meets Foursquare” location-based video ads/coupons depending on which theater you attended and “take the trailers with you” promotional downloads, among others.

The point is that with these robust video-capable smartphones hitting the market, video-oriented promotions become more viable and more appealing. I expect we’ll see a lot more of the Movie Mode type apps going forward.

What do you think? Post a comment now (no sign-in required).

Related posts:

1. YouTube Safety Mode Goes Beyond Human Review
2. YouTube Announces “Safety Mode” As a New Layer of Content Control
3. Potential Blockbuster Bankruptcy Another Reminder of Changed Movie Landscape
4. The Battle Over Movie Rentals is Intensifying

In addition to the private financings, there was also plenty of deal activity in the video space in Q2 ‘10. This includes (in order of date announced), the remains of Veoh being sold to Qlipso, Juniper Networks acquiring software company Ankeena Networks, Nielsen buying video analytics firm GlanceGuide, ActiveVideo Networks adding network game developer TAG Networks, KIT Digital rolling up video asset manager Benchmark Broadcast Systems, Google acquiring Norwegian real-time video provider Global IP Solutions, Sonic Solutions buying DivX, Akamai adding mobile services platform Velocitude and RGB Networks acquiring mobile video encoder RipCode.

Following are the investments that I tracked during the quarter, the date disclosed and new investors identified if applicable. Links are provided to the companies’ press releases, or to relevant media coverage if none could be found (note that I haven’t verified media coverage with companies themselves). If I’ve missed anything or you find an inaccuracy, please post a comment.
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Vidyo ($25M) – April 1 – Four Rivers Group, existing investors

Bightcove ($12M) – April 6 – Existing investors

Edgecast ($10M) – April 12 – Menlo Ventures

3Crowd – ($6.62M) – April 13 – Canaan Partners and Storm Ventures

BlackArrow ($20M) – April 19 – NDS

Zenverge ($30M) – April 21 – Battery Ventures

Imagine Communications ($10M) – April 21 – Existing investors

Freewheel ($16.8M) – April 26 – Steamboat Ventures

Tremor Media ($40M) – April 28 – DFJ Growth Fund, Triangle Peak Partners

Newsy ($2M) – May 5 – Undisclosed investors

Invidi ($23M) – May 5 – Google

blip.tv ($10.1M) – May 19 – Canaan Partners

Transpera ($9M) – June 2 – BlackBerry Partners Fund

Dilithium ($1.5M) – June 3 – Existing investors

Metacafe ($5M) – June 5 – Existing investors

Brand.net ($14M) – June 22 – Focus Ventures

ViaCLIX ($3.1M) – June 22 – Undisclosed

Extreme Reach ($9M) – June 23 – Existing investors

Related posts:

1. Mobile Video Ad Network Transpera Raises $9 Million
2. Apple-Adobe Flash feud helps video solutions companies
3. Consumers Favor Companies Engaged With Social Media
4. Avaak Lands $10 Million Series B Round, Provides Another Example of Video’s Value

Net, net, though I haven’t spent a ton of time with it, my first impressions are generally positive, except for one major, major thing: Hulu Plus programs carry the same full in-stream ad load as programs on Hulu.com. In my “7 Quick Reactions” post earlier this week, I called this out as both a big surprise, and also a key detraction from the service. Now that I’ve experienced the ads, I can say even more emphatically that Hulu Plus must relinquish the ads.

The biggest problem with the ads is that they are discordant with consumer expectations for a paid subscription service. The right comparables for Hulu Plus should be premium cable channels like HBO, Showtime and Epix, and a DVD/streaming service like Netflix. In the former, you’ll routinely see cross-promotions for other programs, but you’ll never see a commercial break. In the latter, aside from previews, you never see any ads at all.
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It’s tempting to say Hulu is more like a basic cable network (e.g. USA, ESPN, MTV) which do have ads. But that would be a faulty comparison, for at least 3 reasons: (1) cable subscribers have experienced a dichotomy between basic (with ads) and premium (no ads) channels from the first days of cable, so their expectations were set early on, (2) many viewers now watch via DVR and improve their experience by skipping the ads anyway (something that can’t be done with Hulu Plus and (3) a lot of basic cable is first-run programming, not past episodes like on Hulu Plus; viewers intuitively get that “new is more valuable than old” and so ads on basic cable, as with broadcast, make sense.

In his interview with AllThingsD earlier this week, Hulu CEO Jason Kilar said that Hulu thoroughly researched potential reactions to including ads. He said Hulu asked consumers “If you had a choice between having it be with no ads and at a higher price, (versus) having it with a relatively modest level of advertising but lower priced, which would you prefer?” According to Jason, they dramatically chose, ‘in large numbers,’ the latter. That finding is unsurprising, but also it doesn’t strike me particularly relevant either as consumers will almost always prefer something that costs less. To me, more pertinent questions would be: “Do you think it’s appropriate to have ads included in a $10/mo subscription service that mainly offers library broadcast network content?” and “Would you subscribe to such a service at this price and with ads?”

Research aside, from a common sense point of view, I can tell you that if I had been a new paying Hulu Plus subscriber, when I fired up that Ally McBeal finale episode last night and was first greeted with a 35-second Sprint Evo ad (followed by 4 more ad pods of 15 and 30 seconds each and concluding with a pitch to buy the episode), I would have been disappointed.

There’s a certain irony in Hulu’s decision to include ads in Hulu Plus, because it has always been so focused on the user experience, and included relatively few ads in its free site. I’ve been a vocal critic of Hulu’s “ad-lite” approach, both because it conditions viewers to expect that online delivery means few ads, and also because it undermined the networks’ P&Ls as convergence devices start to bring online programs to the big screen (lately I’ve been encouraged that networks plan to double the ad load in their online programs).

It’s also worth noting that advertising is a scale business. If you don’t have a lot of viewership and inventory, you’ll make very little money. Given that Hulu’s 40 million+ monthly viewers of its free programs will swamp the number of Hulu Plus subscribers for as long as the eye can see, incremental viewership and ad revenue from Hulu Plus will be a rounding error in the larger scheme of things. That leaves me thinking that Hulu is foolishly trying to “gild the lily” with ads in Hulu Plus.  

Maybe I’m missing something big, but my feeling is that Hulu should nix the in-stream ads immediately. There’s still much uncertainty about whether the fundamental value proposition of Hulu Plus – online access to a library of broadcast network programs for $10/mo – is strong enough itself to gain traction. We’ll only know the answer over time. Meanwhile, the last thing Hulu should be doing is throwing up an obvious roadblock to adoption and ongoing satisfaction by including ads.

What do you think? Post a comment now (no sign-in required).

Related posts:

1. Hulu Dances as Viewers Watch 2.4 hours in February
2. Hulu Captions Search a Preview of General Video Search to Come?
3. ABC.com is Now Achieving "DVR Economics" for Its Programs
4. Google/YouTube Drop Support for IE6 – Good Riddance!

This week Daisy and I discuss Hulu Plus, which was launched earlier this week. There has already been a lot written about Hulu Plus, with most early users reporting favorably on the user experience. I just activated my 7-day trial and gave it a whirl last evening. Reactions are here.

Click here to listen to the podcast (15 minutes, 59 seconds)

Click here for previous podcasts

The VideoNuze Report is available in iTunes…subscribe today!

Related posts:

1. VideoNuze Report Podcast #67 – July 9, 2010
2. VideoNuze Report Podcast #51 – February 26, 2010
3. VideoNuze Report Podcast #53 – March 19, 2010
4. VideoNuze Report Podcast #50 – February 19, 2010